What are unlawful deductions?

Unlawful deductions from your pay and wages are deductions made by your employer that are unauthorised by the law or your contract with them.

What deduction is my employer authorised to make?

Your employer is authorised to make the following deductions.

1. Those that are authorised or required by law. These include:

• National Insurance
• Income tax
• Student loan repayments
• Those that are made as the result of a Court Order

2. Those that have been agreed in your contract of employment as long as you have been given a copy of the contract.

3. Deductions that have been explained to you in writing and that you have agreed to in writing.

4. There are also other deductions that an employer can make subject to specific conditions, for example that they do not leave you with insufficient money to live on. These include such items as the recovery of previous overpayments of wages or expenses.

I don’t know what the deductions are for.

Your employer must inform you in writing of the amount owed by you and the reasons why you owe it and you must agree in writing before the deductions can be made. Ask your employer for an explanation.

I was promised a pay rise but my employer isn’t paying it.

Failing to pay an agreed increase in salary or wages is generally considered to be an unauthorised deduction. 

A customer stole some goods and my employer is deducting the cost from my wages.

If your contract states that your employer is entitled to deduct costs, such as losses, from your wages, then such deductions are legal as long as you still have enough money to get by on. You must be left with at least the minimum wage. The legal limit per pay period however is 10% from your gross pay. If that doesn’t cover the loss your employer must make it up from deductions from multiple pay periods.

I work in a restaurant and a table I served left without paying. My boss wants me to make up for the loss.

If your contract allows your employer to make such a deduction, and it still leaves you with a minimum wage for the pay period, then they are entitled to do so, otherwise it is likely to be an unauthorised deduction.

The legal limit per pay period however is 10% from your gross pay. If that doesn’t cover the loss your employer must make it up from deductions from multiple pay periods.

I believe that my employer has made unlawful deductions. What should I do?

In the first instance you should bring the matter up with your employer and ask them to explain the deduction and why they have made it. Unless it falls into one of the categories given above and you have not agreed to it, then it is likely to be unauthorised. You could try making a formal grievance.

If you are not satisfied then the next stage is to take the matter to an employment tribunal or make a claim for breach of contract in the courts.

The situation has got so bad that I don’t feel that I can keep working for my employer.

If things have got as bad as that, then you have the option of resigning and making a claim for constructive dismissal at an employment tribunal. 

How do I take my employer to an employment tribunal?

You can take your employer to an employment tribunal within three months of the unauthorised deduction or constructive dismissal. If you belong to a union, then you should speak with your union representative; the union might represent you and cover the costs.

Do I need a solicitor?

You should certainly seek the advice of a solicitor that specialises in employment law. At the very least a solicitor can help you assemble a strong case and maximise your chances of making a successful claim. Your union might agree to pay the fees, or alternatively you might be eligible for legal aid.

We strongly advise that you should contact one of our local QualitySolicitors who specialises in employment law. 

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